Chinese smartphone maker Xiaomi files for huge Hong Kong IPO

Xiaomi, one of the world's leading smartphone makers, has filed to go public in Hong Kong in what could be the bigges...

Posted: May 3, 2018 2:10 PM

Updated: May 3, 2018 2:10 PM

Xiaomi, one of the world's leading smartphone makers, has filed to go public in Hong Kong in what could be the biggest IPO in nearly four years.

The Chinese company submitted documents Thursday to list shares on the Hong Kong stock exchange. Its filing didn't give details on the size of the planned IPO, but reports have suggested it could be worth around $10 billion.

A deal of that size would make it the biggest stock market listing since Alibaba went public in September 2014, according to Dealogic.

Xiaomi, one of the world's most valuable startups, declined to comment Thursday on the value of the IPO, which is expected to happen in the next couple of months.

When it raised money in late 2014, Xiaomi was valued at $45 billion. Some recent reports have suggested the IPO could put its valuation around $100 billion, but a person familiar with the company's plans to go public told CNNMoney that it would be lower than that.

CEOLei Jun said in an open letter Thursday that the crisis was "a turning point" for the company.

"As far as we know, apart from Xiaomi, there has never been another smartphone company that has successfully rebounded after a decline in sales," he wrote.

Like Apple, Xiaomi also makes money through services linked to its smartphones, which come with Xiaomi-branded music and video streaming apps already installed.

Last year, Xiaomi's internet services business brought in about 10 billion yuan ($1.5 billion) in revenue. But that's still a fraction of the 80 billion yuan ($12.5 billion) it made from smartphone sales.

Chinese tech companies have also found themselves caught up in a trade dispute between Washington and Beijing.

Xiaomi acknowledges that a trade war could be a risk for investors. In its filing Thursday, the company said that in the event of trade or import protection policies, "our business and operations may be adversely affected."